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Many of the conquistadors opposed the idea of enslavement of natives due to their sheer overwhelming numbers, while Christian missionaries did so on ideological-religious basis. Suppose somehow the decision is made to congregate the remaining natives into largely self-governing towns paying tribute to the King and perhaps Church. What I mean to ask is, what would've been the long term effects of such, more soft exploitation?

For instance, the core population of natives was there to stay no matter how widespread disease was or how brutally genocidal the colonials were going to be. As such, on a long term approach, the colonial masters should've been interested in integration of natives into mainstream society. A good cop - bad cop cooperation between the Spanish and the Church may have planted more positive views of 'Europe' into the natives and helped their integration into the European cultural sphere.

Also, while being a bit of an oversimplification, slavery wasn't as economically beneficial as the labour of free workers. The residents of these communities could've pursued their goals much more efficiently than being slaves to the system, and in the end, they could still be used as tax cattle - being taxed by both State and Church all the while exploiting the rest of their economies as captive markets.

Such light treatment would also help more allies among natives, meaning more cooperation with adjusting to New World environment, discoveries of the inner parts of the Southern continent, etc. IOTL the colonials didn't have acces to lots of native labour hiding from the Iberians. Maybe in our fictional setting, their newly gained allies could've brokered deals with such peoples.

Thoughts on the matter? What positives or negatives were there to vassalization as opposed to outright enslavement, both economically and culturally speaking?
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